How do you invest in Bitcoins?

A:

Quick Answer

Bitcoin can be purchased outright from online Bitcoin dealers, invested in by trading with other investors on an online Bitcoin exchange, or bought and sold in person with local investors. Sources for each of these methods are located online. No specific amount of capital is required.

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Dealers sell Bitcoin from their inventory with a mark-up attached, much like an online store. A fee of 1 percent of the Bitcoin purchased is average. Some of these firms make purchasing Bitcoin easy by allowing you to link your Bitcoin purchases to your bank account. Many investors take advantage of this by scheduling automatic Bitcoin purchases on the days they receive their paychecks.

Research Bitcoin exchanges

Online Bitcoin exchanges do not sell Bitcoin directly. They serve as a medium for investors to trade against one another. There is higher liquidity with Bitcoin exchanges than there are with outright Bitcoin purchases. Fees are also lower, usually 0.5 percent to 0.2 percent per trade. Significantly more time and investment savvy are required to invest on a Bitcoin exchange, and there are risks in making bad trades and racking up fees with frequent trading.

Explore offline Bitcoin buying

There are websites that pair local Bitcoin buyers and sellers. In these cases, once a deal is struck, the Bitcoin is held in escrow for 24 hours until the buyer and seller meet in person to compete the sale.

Choose the best method for you

Consider fees, time involved, convenience and your level of comfort with each method before deciding how to invest in Bitcoin.